Essay - ORDER OF PROGRESSION IN ANALYZING CONTRACT PROBLEMS Flashcards
What is the order of progression for contracts remedies?
- Damages (expectation, consequential, liquidated)
- Restitution (money restitution)
- Specific performance
- Special remedies if applicable: Rescission, Reformation
What are damages in contract?
Money awarded for Injury to the plaintiff arising out of a breach of contract by the defendant.
What are the 3 types of contract damages?
- Expectation Damages
- Consequential Damages
- Liquidated Damages
What are expectation damages?
This is the benefit plaintiff expected to get out of
the contract at the time of formation. how much they got-how much they expected to get)
What are consequential damages?
Special damages that are foreseeable at the time the contract was entered into. (importance of time in contract, or its a condition)
What are Liquidated Damages?
These are damages specified in the contract.
For liquidated damages clauses what is the 2 part test to see if they are valid?
First look to see if damages are very difficult to ascertain at the time of contract formation. If yes, then it would be invalid.
Second look to see if it was a reasonable forecast of what damages would be. If the amount is excessive it would be a penalty and be invalid
What if there is a clause that says “that one can get either actual damages or liquidated damages”?
This is an invalid clause, delete it. Give them actual compensatory damages.
What is restitution in Contracts?
Money restitution: Benefits unjustly retained by the defendant when there is a void or unenforceable contract, or where the plaintiff chooses not to sue on the contract, permitting recovery in quasi contract
Can plaintiff as the non-breaching party get restitutionary damages for property/money given to, or services rendered for, defendant?
Yes, for the value of the benefit
the value of the recovery may be greater than the contract rate.
Contract for land, price = $100,000. Plaintiff, the breaching party, after paying 30% of the purchase price, defaults. Can plaintiff get any restitutionary damages? Under the traditional view? the modern view?
Traditional view: no recovery
Modern view: recovery is allowed, But Cannot be greater than contract rate and is reduced by any damages suffered by defendant as a result of the breach.
What is specific performance?
Order to the defendant to specifically perform the
contract.
What do you need to show to get specific performance?
(If Phil needs to specifically perform he needs) Viagra to Satisfy Inadequacy For Dudes
- Valid contract- definite and certain terms
- Satisfaction of conditions/performance by the plaintiff,
- Inadequate- an inadequate legal remedy,
- Feasibility- feasibility of enforcement,
- Defences- and no defenses
- What do you ask to see if there is a valid contract?
Are the terms of the contract sufficiently DEFINITE AND CERTAIN?
What constitutes satisfaction of performance by the P in a contract?
already performed, ready and able to perform, or excused from performing
(are the remedies Inadequate?
Why would damages or money restitution be inadequate in contract?
Money Is Sometimes Inadequate if Unique
1. There may be a multiplicity of
suits
2. There may be an irreparable injury (remember uniqueness as well)
3. Damages may be too speculative
4. The D could be insolvent
5. Plaintiff may seek to recover a unique chattel or it’s land.
(are the remedies Inadequate?)
Why would replevin be inadequate is contract?
- Defendant can post a bond.
2. The sheriff may be unable to find the property.
Is a specific performance decree FEASIBLE?
- Too much supervision
- No jurisdiction over parties
- negative injunction may be innapropriate (non-compete clauses)
What are the defenses to specific performance?
- Laches
- Unclean Hands
- Freedom of Speech
- Hardship
What isLaches?
The effect of the passing of time. Has the plaintiff’s inaction encouraged or allowed the defendant to act to her detriment?
What is unclean hands defense?
Plaintiff must come into equity with “clean hands.” Must be related to the transaction in the suit.
What is freedom of speech defense in contracts??
First Amendment rule against prior restraint.
What is hardship defense in contracts?
In a suit to specifically enforce a contract, a court of equity may refuse to enforce a contract in which there is inadequate consideration (low price) and there are onerous terms.
